Air Asia ± Pricing Strategy

gained RM 113 million Going public on 2004 and got its own airport on 2006 .Company Overview Established by DRB-Hicom Berhad in late 1996 Part of Tune Group 8th December 2001. Tony Fernandes had taken over AirAsia with RM 1 (40mil) 7 month in operation.

Low operating cost .Now everyone can Fly! A low-cost carrier among the airline industry . 2.Have a very lean organization structure and operating costs are kept to the bare minimum with low wages.Offer low fare for all destination around the world. Management strategy Maximize shareholders value Profit creation by expending business reach within Asia and Europe .

Focus on customer needs No fuel charge. customers just need to pay tickets price and tax Comprehensive distribution channel Operation excellence All staffs are contribute-no ranks or hierarchy Performance based remunerations and incentives .

a firm varies its price from hour to hour or day to day basic.Pricing Strategy Price Objective ± Maximum market share Air Asia using randomized pricing strategy and this strategy to increase the market demand and profit maximize With a randomized pricing strategy. consumer cannot learn from experience which firm charges the lowest price in the market . When a firm randomly changes the prices of their goods. consequently.

Internet Air-fares & e-marketing ‡ Usually direct to consumer ‡ Employs special event pricing and psychological discounting .

Rivalry ± Malaysian Airlines (MAS) ‡ Introduced Firefly to regain market share ‡ Aggressive discounting on international long haul flights. ie. . brings down air travel prices. KL London ‡ Good news for travellers.

Asia and Oceania Subsidaries. joint-ventures in asian countries ± Thai Air Asia. 2009. increases the frequency of flights for certain destination not only in Malaysia but Asia countries too. VietJet Air Asia.Addition of new routes. Lowest cost airline in the world . (Air Asia X) Over 13 destinations worldwide ± Europe. increased flights Air Asia airline now introduced new flights routes to countries around the world. Indonesia Air Asia.

passengers have to wait for the flights for long hours and this make them feel uncomfortable Discriminatory policies for disabled passengers .Problem Areas Flight delay complaints from passengers Air Asia passengers start to complain about delays of the flights for certain destinations.

Carbon offseting flights.Conclusion ‡ Air Asia has grown to become a leader in low cost airfare ‡ Strong branding practices have made more consumers familiar with the brand ‡ Focus on more CSR approach ie. .

Q&A ‡ Should Air Asia expand its operations to include cargo carriage? ‡ Can Air Asia retain its market share if a new player enters the market? .

Thank you for your time .

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